Air China Profit Jumps 60% on Travel Rebound, Hedging Gains
Air China Profit Jumps 60% on Travel Rebound
Nelson Ching/Bloomberg
Air China, the nation’s largest international carrier, boosted first-half operating profit 45 percent to 4.1 billion yuan.
Air China, the nation’s largest international carrier, boosted first-half operating profit 45 percent to 4.1 billion yuan. Photographer: Nelson Ching/Bloomberg
Aug. 25 (Bloomberg) -- International Air Transport Association Chief Executive Officer Giovanni Bisignani talks about the outlook for the global airline industry. International passenger demand rose 9.2 percent in July from a year earlier and international scheduled freight traffic increased 22.7 percent, according to IATA, which represents 230 airlines carrying 93 percent of international traffic. Bisignani speaks from Sydney with Bloomberg's Susan Li. (Source: Bloomberg)
Air China Ltd., the world’s largest carrier by market value, boosted first-half profit 60 percent on surging travel demand and fuel-hedging gains.
Net income rose to 4.61 billion yuan ($679 million) from 2.88 billion yuan a year earlier, the company said in a Hong Kong stock exchange statement late yesterday. Sales rose 51 percent to 34.8 billion yuan. Profit beat the 3.9 billion yuan average of four analyst estimates compiled by Bloomberg.
The carrier, part-owned by Cathay Pacific Airways Ltd., had a 721 million yuan gain from fuel hedging and boosted group passenger numbers 35 percent because of a bigger fleet and rising demand. This year will be “great” for airlines worldwide, International Air Transport Association Chief Executive Officer Giovanni Bisignani said yesterday.
“Air China benefited most from a rebound in international travel,” Harry Chen, a Shenzhen-based analyst at Guotai Junan Securities Co., said before the earnings. “The industry as a whole is at a high point.”
Separately, an Air China affiliate Henan Air yesterday grounded its fleet after a crash that killed at least 42 people. The Aug. 24 accident in the northeastern province of Heilongjiang, was China’s first fatal crash in almost six years.
Air China, the nation’s largest international carrier, boosted first-half operating profit 45 percent to 4.1 billion yuan. The Beijing-based carrier’s premium-class sales climbed “significantly,” helping drive a 12 percent increase in yield, a measure of average fares. The group carried a total of 26.3 million passengers.
Share Performance
The carrier fell 0.5 percent to HK$8.48 at 11:05 a.m. in Hong Kong. The stock has climbed 40 percent this year, compared with a 53 percent gain for China Southern Airlines Co., the nation’s biggest carrier by passenger numbers, and an increase of 50 percent for China Eastern Airlines Corp.
China Southern reported a first-half operating profit compared with a year earlier loss as the global economic rebound revived travel demand. Net income surged on the sale of a stake in a maintenance venture. China Eastern is due to report earnings later in the month.
The global airline industry may post a combined net income for the first time in three years as travel demand recovers from the worst recession in more than six decades, according to IATA.
Under domestic accounting standards, Air China reported a first-half net income of 4.7 billion yuan and sales of 34.3 billion yuan.
--Li Xiaowei. Editors: Neil Denslow, Josh Fellman
To contact Bloomberg News staff for this story: Li Xiaowei in Beijing at +86-10-6649-7506 or Xli12@bloomberg.net
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